Towards a circular economy model

The focus and growing awareness of both politicians and the public is encouraging Luxembourg to move from a linear to a circular economy. The limitations of “extract — manufacture — consume — throw away” are becoming more and more apparent.

For several years now, Luxembourg has been a strong advocate for a sustainable development policy in economic, social and ecological terms. This process, aimed at imagining the country as it will be tomorrow, led the Ministry of the Economy to launch a study on the current situation and assess the potential for the future development of the circular economy in Luxembourg.

Based on a roadmap, the strategy for implementing such a circular approach includes several key areas and pilot projects which can be implemented in the short to medium term. The foundations are already very good, since, according to the presentation made by the former Secretary of State for the Economy, Francine Closener, the country has more than 15,000 jobs based on circular models, particularly in the steel and construction industries.

The study also showed the full impact that the rigorous implementation of a circular model would have on the economy. For Luxembourg companies, this could represent savings in procurement costs estimated at between €300 million and €1 billion per year. For Christian Tock, Director Sustainable Technologies at the Ministry of the Economy, “moving towards a circular economy is essential in order to avoid overexploitation of resources. We must help companies to move from one business model to another, without this affecting their business. This is smart and sustainable growth.”

To reach this level of maturity, all players in the Luxembourg economic landscape are invited to create or take part in pilot projects in key sectors such as construction, ICT, finance or logistics. All actions related to ecodesign, industrial ecology, recycling, reuse, reuse and repair can be attributed to the circular economy.

Bringing the sectors together and working across the board is something we know how to do and we do it well.

All of them comply with the principles of longevity, quality, functionality and absence of waste. “Some companies have already integrated these principles well into their production, for others the process is longer,” says Dr Tock. “A paradigm shift is needed to change our economy. Bringing the sectors together and working across the board is something we know how to do and we do it well. Cross-sectoral thinking makes a difference. The ecosystem and the driving forces are in place, but what remains is to encourage them to think and act differently.”

A new vision

A new conception of the economy is gradually emerging, that of the functional economy. In line with the circular economy, the functional economy consists of replacing the sale of goods with service or rather performances. The sup-plier remains the owner of the product and can benefit from the efficiency of the product, take advantage of the innovation effort made during it’s design and recover the materials at the end of use. This new concept helps meet the requirements of sustainable development. However, switching to this model requires a strategy, and above all, a strategic commitment.

“It is too easy to point the finger at companies that are now forced to move forward in a linear polluting model. They must, of course, be made responsible, but above all, they must be helped to profit financially from the benefits and efficiency of their products,” Dr Tock explains. “In fact, the idea of transforming products into a service is not new. What is new is the emergence of new technologies, such as robotics or the Internet of Things. This model, which was only valid for high-end products, can now be applied to more affordable products. Not everything is immediately achievable, but the important thing is to start creating the required ecosystem today.”

Luxembourg’s willingness to move to a circular model is clear. In 2018, the circular economy was embodied in the “Climate Pact”, a programme in which all Luxembourg municipalities participate. Led by the Ministry of Sustainable Development and Infrastructure and the myenergy agency, the “Climate Pact” offers municipalities the opportunity to play an active role in the fight against climate change and to seek the support of the State. In a report published in May 2018, the Ministry announced that the investments undertaken since the beginning of the pact represented €55.2 million, a significant amount.

At the local level, projects are also progressing well, such as the con-version of the former industrial wasteland of the city of Wiltz in northern Luxembourg, proudly presented as the future municipal “hotspot” of the circular economy. The pilot project, called “Wunne mat der Wooltz”, places particular emphasis on collaborative economics, materials passport and mobility.

With the same objective, the Fit 4 Circularityprogramme, managed by the Ministry of the Economy and the Luxembourg EcoInnovation Cluster of Luxinnovation, was designed to facilitate and accelerate the transition of companies to the circular economy. “The programme has provided the companies with new strategic business opportunities and also solutions to solve raw material supply issues, that they probably would not have identified without its support,” says Charles-Albert Florentin, manager of the Luxembourg EcoInnovation Cluster.

Luxembourg as a test bench

This vision of a less linear economy is, moreover, in line with the strategy on the third industrial revolution, launched by the Luxembourg government in collaboration with the team of the American economist Jeremy Rifkin. Taking a participatory approach, the strategic study is based on the convergence of information and communication technologies, energy and transport within an intelligent network. The circular economy is an important focus of this strategy, as its impact is transversal to all areas. The Strategic Monitoring Committee responsible for overseeing the implementation of the Rifkin strategy states that two-thirds of the priority measures identified have already been completed, to 80% after 18 months of work.

One of Luxembourg’s strengths is that the country can be considered as a laboratory, a real test bench for all types of circular projects.

Nine measures were identified as priorities by the Government Council in November 2016, including the construction of a national energy internet; the implementation of a flagship project to demonstrate the socio-economic aspect of smart, sustainable, circular and zero-energy districts; the promotion of electromobility; and the launch of a programme for emission-free personal vehicles.

The country can also count on the presence of so-called “champion” companies such as Tarkett or Apateq. It also attracts smaller companies that have chosen Luxembourg to develop their activities, such as Eiravato, a young start-up that has created a platform for waste optimisation and secondary materials management. “One of Luxembourg’s strengths is that the country can be considered as a laboratory, a real test bench for all types of circular projects,” says Georges Schaaf, Head of Sector Development – CleanTech at Luxinnovation. “Thanks to its small scale, Luxembourg has a lot to offer!”

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